Reasons to Downsize to a Smaller Home
The kids have moved out and you finally have the house to yourself! While your first instinct may be to turn the kid’s bedroom into a gym or crafting room or do some renovation to make the house bigger, you may want to think of going smaller instead. So, when is it a good time to downsize into a smaller home? Here are a few things to think about when making that decision.
Big house, big expenses.
Maintenance, insurance, property tax, costs of heating or cooling unused rooms—keeping a large house can be expensive. When it’s only you two, why keep the extra space? There may be a period where you’re happy to have your home available for your kids and even grandkids to come back for the holidays and have a place to stay, but at what point is it more cost effective to put them up at a nearby hotel instead? If you downsize to a smaller, less expensive home, you can reduce your monthly expenses and put more funds toward enjoying your retirement.
Your home isn’t retirement ready.
As you’re approaching retirement, you should be looking around at your current home and think if it will work for when you get older. Are hallways and doorways wide enough for walkers or wheelchairs? Do you have to remodel the bathroom to accommodate a walk-in shower? Does it have stairs that may be problematic to climb (or risk falling down) as you age? If your bedroom and master bath isn’t already on the first floor, you may eventually need to find a new location that is more appropriate for aging in place.
Free yourself from the mortgage.
If there is still a mortgage on your property, you could downsize to a smaller house and potentially pay off the current mortgage in the process. Perhaps there will be a little extra to go toward your investments as well. This is an excellent way to reduce your spending need in retirement and get further down the path to financial independence!
You may not think of downsizing immediately after your kids leave the nest, but it’s something to consider at some point. Downsizing your belongings to fit in a smaller home may take time as well. Regardless, it’s better to consider if or when you’d need to downsize now than get to a point where it is mandatory, and you don’t have a choice. Whether it be for financial reasons or health reasons, moving to a smaller space may help with the success of your long-term goals!